GMX Price Prediction as DEX Token Slumps 6.5% – Future Direction
GMX Price Prediction as DEX Token Slumps 6.5% - Future Direction
The Rise and Fall of GMX: A Closer Look at the Blockchain Industry
GMX/USD Chart / Source: Adobe
GMX, the governance and utility token behind GMX, an Arbitrum-based decentralized exchange (DEX) for trading perpetual cryptocurrency futures with leverage, has experienced a significant downturn in the last 24 hours, according to CoinGecko. With a decrease of approximately 6.5%, it currently holds the title of the worst-performing cryptocurrency in the top 100 by market capitalization within this time frame.
As of Friday, the GMX/USD token fell just above $50, dropping below its 50-Day Moving Average (DMA) of around $53. It had previously lost its grip on its 21DMA near $56 earlier in the week. This recent decline has brought GMX to its lowest levels in over a month, with the cryptocurrency now down 18% from its earlier highs of approximately $62.
Surprisingly, there doesn’t seem to be any specific catalyst behind the recent decline in GMX’s price. However, a closer look at DeFi Llama reveals that the trade value locked (TVL) in GMX’s smart contracts has been decreasing in recent months. The protocol’s ETH-denominated TVL, which currently stands just under 500,000 ETH, has dropped from over 700,000 ETH in February. Similarly, its USD-denominated TVL has fallen from over $1.26 billion earlier this year to just under $1 billion.
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The decrease in ETH-denominated TVL suggests that the protocol is struggling to retain crypto capital, which could explain the recent underperformance of the GMX token.
Price Prediction – Where Next for GMX (GMX)?
After GMX reached its peak above $60 earlier this month and was rejected by the 100 and 200DMAs, a strong bearish signal was sent. The recent decline below the 50DMA confirms that the bears have regained full control. With no significant levels of support aside from the late-June lows just above $50, it is highly likely that GMX will fall back to the June lows in the $41s, resulting in a potential downside of around 20% from its current levels.
One potential lifeline for the GMX protocol could be the high yields currently offered to liquidity providers who mint the protocol’s liquidity-providing token, GLP. According to a recent tweet from GMX, the annual percentage yield (APY) for GLP was last recorded at 12.5% on Arbitrum. This is significantly higher than the yields available in most other corners of the Decentralized Finance (DeFi) market, such as staking ETH via a liquid staking protocol, which yields around 4%. If crypto investors start seeking higher yields, the outflows from GMX could quickly turn into inflows.
However, it is worth noting that investing in GLP carries significant risk, as its price is negatively related to the net profits of leveraged traders on the GMX platform. If these traders start to generate substantial gains, GLP investors may suffer losses.
Meme Coin Alternative to Consider
While GMX’s outlook may be downbeat, diversifying token holdings is always a wise strategy for traders. Established cryptocurrencies like bitcoin (BTC) and ether (ETH) are reliable choices. However, for investors with a higher risk tolerance and a desire for near-term profits, meme coins can be an intriguing option.
To maximize potential gains in the meme coin market, investors should identify relatively unknown tokens with low market caps that have the potential to experience explosive growth. In this regard, analysts at Cryptonews.com have identified an interesting project: Burn Kenny Coin. This brand-new South Park-themed meme coin launched its presale recently and has already sold a remarkable $440,000 worth of $KENNY tokens. Considering the project aims to sell only $500,000 worth of tokens, meme coin enthusiasts must act swiftly to avoid missing out.
There are several factors that make Burn Kenny Coin a promising investment opportunity:
- The token’s limited presale availability creates pent-up demand and fear of missing out (FOMO), which is likely to carry over to the decentralized exchange (DEX) launch.
- The presale values the token at a tiny market cap of $875,000 (accounting for the 30% token burn), leaving ample room for explosive upside potential.
- A three-month DEX liquidity lock, verified on Team Finance, ensures smooth trading conditions, with 30% of the token supply already committed.
- The marketing team behind Burn Kenny Coin has previously orchestrated successful token launches for SpongeBob (SPONGE), Thug Life (THUG), and Mr Hankey (HANKEY), resulting in significant price pumps ranging from 3x to 100x. Their efforts have garnered significant attention across the crypto press, which bodes well for $KENNY.
Get Hold of $KENNY Before the Presale Ends
With the presale having raised nearly $450,000, it is highly likely that Burn Kenny Coin’s presale will sell out within a matter of hours. To participate, interested individuals should visit the Burn Kenny website, follow their Twitter account, and join their Telegram channel to stay updated on the presale’s conclusion and the imminent DEX launch.
To purchase $KENNY during the presale, Ethereum is required. Users can connect their wallets at the Burn Kenny Coin website, set the desired purchase amount, approve the connection, and complete the purchase. After the presale concludes, users can return to the site and claim their tokens.
Investing in crypto is inherently high-risk, and this article is provided for informational purposes only. It does not constitute investment advice, and there is a possibility of losing all invested capital.
Disclaimer: The information presented in this article is for educational and informational purposes only and should not be considered as financial or investment advice.
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